The United States has used various iterations of a minimum wage for over 100 years now. Employers are obligated to pay workers at least this wage per hour. They certainly always have the option to pay more, but they cannot offer workers a job for less than the minimum wage. To do so would be a violation of the worker’s rights.
However, as minimum wage has evolved over time, there can be conflicts between the federal minimum wage and the wage set at the state level. In 2025, the federal minimum wage for most employees is $7.25 per hour. But if the state wage is higher than that federal level, which amount does an employer actually have to pay?
The higher wage takes precedence
Most states have their own minimum wages, some of which are higher than the federal level. For instance, in California, the minimum wage is set at $16.50 per hour. States make this determination for many reasons, including the cost of living (COL).
In a case like this, it is important for employers and employees to remember that the higher wage is the one that must be paid. An employer may look at the federal regulations and try to pay just $7.25 an hour, but if the business is based in California, then they actually need to pay at least $16.50 per hour. The employer would still be violating the law to pay $7.25, even though they are technically in line with the federal guidelines.
Many states have higher minimum wages than the federal level, while there are others that simply default to the federal wage, sometimes by not setting a state minimum wage at all.
Resolving a conflict
Wage and hour issues can certainly lead to significant conflicts between employers and employees, and it is crucial for them to know exactly what legal steps to take and what options they have.